The government has raised export duty on iron ore to ad valorem 30% on lumps and fines, with effect from December 30, 2011, compared to 20% earlier. The government may have hiked export duty validates our long held view that the burden of policy risk in India continues to weigh against iron ore exports. This increase in duty may gain government by INR 8500 - INR 9000 Cr. to cut fiscal deficit and also, may be the government wants the Indian companies to have sufficient iron-ore before exporting to other countries.